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The price of a product or service is defined as cost plus profit, whereas cost can be broken down further into direct cost and indirect cost. [1] As a business has virtually no influence on indirect cost, a cost reduction oriented cost breakdown analysis focuses rather on factors contributing to direct cost.
Pricing is the process whereby a business sets and displays the price at which it will sell its products and services and may be part of the business's marketing plan.In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of the product.
In general business, price analysis is the process of evaluating a proposed price independent of cost and profit. [1] [2] Price analysis began in 1939 when economist Andrew Court decided to analyze prices to better understand the environmental factors that influence this practice. [3]
Business communication is the act of information being exchanged between two-parties or more for the purpose, functions, goals, or commercial activities of an organization. [1] Communication in business can be internal which is employee-to-superior or peer-to-peer, overall it is organizational communication.
A limit price is the price set by a monopolist to discourage economic entry into a market. The limit price is the price that the entrant would face upon entering as long as the incumbent firm did not decrease output. The limit price is often lower than the average cost of production or just low enough to make entering not profitable.
The concept of reasonableness has two related meanings in law and political theory: As a legal norm, it is used "for the assessment of such matters as actions, ...
In business this requested amount is often referred to as the offer price (or selling price), while the actual payment may be called transaction price (or traded price). Economic price theory asserts that in a free market economy the market price reflects the interaction between supply and demand : [ 2 ] the price is set so as to equate the ...
Value-based price, also called value-optimized pricing or charging what the market will bear, is a market-driven pricing strategy which sets the price of a good or service according to its perceived or estimated value. [1]